In what may have been his last outing as the Commissioner for Financial Services, Financial Stability and Capital Markets Union, Executive Vice-President Dombrovskis presented the Commission’s long-awaited Digital Finance package on Thursday.
In his presentation of the European Commission’s plans for the future of the EU’s payments and FinTech industry, Executive Vice-President Dombrovskis left big shoes to fill for his successor designate Mairead McGuinness, whose job it will be to shepherd the proposals through the legislative machinery.
As part of its package, the Commission presented its strategy on further maximising the opportunities of digital finance, through reducing barriers, driving new digital innovations and boosting payments services providers’ access to data to develop new business solutions.
As part of this strategy, Dombrovskis presented a widely awaited Regulatory proposal on crypto currencies to bring previously unregulated digital currencies, including “stablecoins” such as Facebook’s mooted “Libra”, under its oversight. Recognising the potential for such unregulated digital currencies to undermine and threaten the financial stability of the euro-area, the proposed regulatory framework sets out strict requirements for issuers of such crypto-assets in Europe and service providers who wish to operate in the EU.
In a further push towards digitising, democratising and simplifying access to financial services across the EU’s Single Market, the Commission announced plans to review its Regulation on electronic identification and trust services (e-IDAS) as part of its forthcoming Digital Services Act package. A proposed expanded scope of the e-IDAS Regulation would create a universally available and useable EU digital identity for citizens and business that would allow them to safely log into digital public and private services such as hotel or flight bookings.
In line with President von der Leyen’s “geo-political Commission,” and a slight echo of “Europe-first” the presented Retail Payments Strategy aims to create an integrated, EU-wide payments market based on so-called “Instant Payments” as a standard by the end of 2021. While Instant Payments are currently predominantly used when transferring money between different accounts, the Commission believes there to be common-day applications, in particular for physical and online purchases, which are currently dominated by payment card schemes.
In order to entice consumers to forego the usual debit or credit cards in their wallets, the Commission is currently working with a number of private sector initiatives to further develop non-card based retail payments solutions based on QR-codes, Bluetooth, and Near-Field Communication (NFC) chips as used in the majority of phones today.
In this context, the Commission has also pledged to review its e-Money Directive and 2018 landmark revised Payment Services Directive (PSD2) in the coming year to assess how to further open competition in the payments sector while safeguarding customer convenience and security.
Compliments of Vulcan Consulting – a member of the EACCNY.